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The Case for Replicating Online Platforms, Not Scaling Them

Martijn Arets, an international expert on the emergence and development of the collaborative economy, has studied and discussed the sharing economy in many European countries. Arets sees a difference between sharing economy innovation in the northern half of the continent, which he says is focused more on online platforms, and the southern half, which is focused more on offline sharing, like cooperatives. In the southern half of Europe, people are more accustomed to living in tight communities, says Arets.

He also sees an important difference in the amount of control that online platforms like Facebook have over their users, versus platforms with a mix of online and offline activity, like Airbnb or Uber. Arets lists four main areas in which platforms provide value: matching supply and demand, and providing a reputation system, booking system, and insurance. Arets believes that most of these aspects can take care of themselves. once the initial match between provider and consumer is made, particularly once a reliable portable reputation system exists.

Much like the current discussion around the need for portable benefits, many sharing economy thought leaders argue that we need a portable reputation system that follows users from platform to platform (Deemly, which originated in Copenhagen, is one example of such a service). Reputation systems function as a type of Human Resources Department for online platforms. Currently, early adopters of platforms have the best reputations by default says Arets, because they have the most reviews, giving them an advantage over everyone who joins the platform later. Arets counters the prevailing notion that platforms should aim to be continually disruptive—companies can’t stay disruptive for 10 years, Arets maintains, only for around two. Arets also argues in favor of replicating platforms rather than scaling them because smaller, more localized platforms have a better understanding of the communities in which they operate and will thus be more successful in building their own ecosystems.